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HSI +8pts (unch) 28,004 HSCEI -21pts (-0.2) 10,153 T/O HK$153.69bn (flat DoD)
Opened higher with FTSE and DAX working higher but CAC selling down. Busy day for earnings with Richemont, Rio Tinto and Ericsson reporting and Burberry issued a Q1 trading update.
New Car Registrations Jun +10.4% YoY vs 53.4% May (F/cast was 22%)
Balance of Trade May €7.5B vs €10.9B Apr (F/cast was €16.4B)
Core Inflation Jun +0.9% YoY vs +1% May (F/cast was +0.9%)
Inflation Jun +1.9% YoY vs +2% May (F/cast was +1.9%)
Inflation Jun +0.3% MoM vs +0.3% May (F/cast was +0.3%)
Opened Dow -32pts S&P -0.1%, NDX -0.1% in Asia, currently Dow +18pts S&P and NDX marginally higher. Caution ahead of earnings, Retail Sales, Business Inventories, Michigan Data, Baker Hughes rig data, Overall Net Capital Flows, Foreign Bond Investment and Net Long Term tic Flows.
CHINA CSI 300 closed -57pts (-1.1%) @ 5,095
CSI 300 opened lower around 5,140 and trended lower through the morning down to 5,114 before bouncing into lunch. PM market sold down to close just off the day low.
Sentiment weak as US/Sino relations seem to be deteriorating with China snubbing a meeting says the FT. Also concerns about the tightening of local government finances.
Shanghai-based stocks were relative outperformers as Beijing accorded the hub greater autonomy to offer tax breaks, incentives to entrench its role.
Foreigners net sold US$641m Chinese shares via Stock Connect today.
Shanghai Composite -25pts (-0.7%) @ 3,539
Shenzhen Composite -197pts (-1.3%) @ 14,972
ChiNext Composite Index -73pts (-2%) @ 3,551
HSI Pre market opened @ 27,973 -24pts vs -108pts ADR’s
Traded in a tight range on 100pts with concerns over US/Sino relations through the morning until it was announced that HK IPO’s would not be subject to cybersecurity prompting a bounce in the market to 28,136 as HKEX rallied. PM trended higher initially to 28,200 but hit resistance and sold down to 28,050 level and traded sideways into the close. Hang Seng Rebalance on the close saw the HSI drop 81pts in the closing auction. T/O flat despite the rebalance on the close
HONG KONG DATA
HK Business Confidence Q3 6 vs 0 Q2 (F/cast was 2)
HK reported 1 new imported covid case
Short Selling Friday 16% vs 20.1% Thursday
Top Shorts Hengan (1044) 41%, Bud Apac (1876) 39%, Ping An (2318) 32%, Ali Health (241) 31%, Country Garden (2007) 31%, Bank of China (3988) 26%, Baba (9988) 25%,
AFTER MARKET NEWS
XIAOMI-W (01810.HK) announced that the Company has been notified by Lei Jun, Chairman and Executive Director, that he recently donated approximately 616 million class B shares of the Company to two charitable organizations, where half of the shares went to Xiaomi Foundation and the other half went to Lei Jun Foundation. Both entities will use the proceeds for charitable purposes.
CHALCO (02600.HK) Positive Profit Alert expected to record a net profit amounting to approximately RMB3 billion for the first half of 2021, representing a year-on-year increase of approximately 83 times.
Xiaomi's auto unit will grant employees with independent share options under an equity incentive plan, which will be distributed by phases within five years, reported Chinese media.
Specifically, all mature options could be monetized should the firm's annual auto sales reach 1 million units under healthy operation.
ByteDance has suspended the registration of new users and content creators on its "Toutiao" since September last year, reported Reuters, citing sources. "Toutiao" application is still available for download and existing users can still use the app.
CCL last printed at 187.87, up 0.63% weekly.
CCL Mass climbed 0.5% weekly to 190.58.
CCL (small-to-medium flats) gained 0.64% weekly to 188.32.
CCL (large units) added 0.57% weekly to 185.48.
The research department of Centaline Property, expected home prices to keep struggling briefly before shattering peak.
OIL companies weak as crude oil dropped onOPEC+ deal and the USD strengthened; CNOOC (883 HK -1.3%) CH OILFIELD (2883 HK -4.3%) PETROCHINA (857 HK -2%).
COAL FIRM as heat wave push coal prices towards a record level. CH COAL (1898 HK +2%) YZ COAL (1171 HK +4.1%).
BASE METAL STRONG after Aloca boosts shipment forecast. ANGANG (347 HK +3.3%) MAANSHAN (323 HK +3%).
*E-COMMERCE WEAK profit-taking following recent rebound. MEITUAN's (3690 HK unch) Meituan Dache says it is recruiting drivers across 37 Chinese cities. The ride-hailing business pledges to provide new drivers with benefits like a seven-day commission-free period. TENCENT (700 HK -0.17%) ALIBABA (9988 HK -0.6%) KUAISHOU (1024 HK -2.5%).
*CHINA PROPERTY WEAK after China's average new home prices in 70 major cities grew 0.5% YoY in June, down from a 0.6% rise in May, NBS data showed yesterday.
CH EVERGRANDE (3333 HK +9.5%) announced plans to meet on July 27th to discuss a special dividend after shares of the debt-laden developer reached a four-year low; most likely a short squeeze.
SUNAC (1918 HK -1.4%) SHIMAO (813 HK -1.3%) COUNTRY GARDEN (2007 HK -1%) CIFI (884 HK -1.5%).
*RETAILERS WEAK as SASA INTL (178 HK +0.5%) announced turnover in HK & Macau jumped 38.7% YoY to HK$563.6m for the three months ended June, due to the low comparison base and thanks to strong growth in online business. However, retail and wholesale numbers slumped 68.7%. Same-store sales in HK & Macau +44.5% percent, and for the mainland was 7.2%.
LUK FOOK (590 HK -1%) said overall same store sales growth reached 118% yearly for 1Q ending 31 March 2022.
FAST RETAILING (6288 HK -3.4%), the owner of Uniqlo, expects revenue of 2.15t yen. Its profit projection stays at 165b yen, falling short of estimates.
*SHIPPING/LOGISTIC FIRM. Container rates from Asia to the US and Europe reached record levels over the past week, ensuring transportation costs will stay elevated for companies heading into a peak season for rebuilding inventories. PAC BASIN (2343 HK +6.3%) COSCO SHIPPING (1919 HK +1.8%).
HKEX (388 HK +3.8%) jumped on the news that Hong Kong IPOs are planned to be exempted from China's Cybersecurity reviews. KINTOR PHARM (9939 HK +13%) Proxalutamide approved for treatment of hospitalized Covid-19 patients, Paraguay approval marks first EUA for Proxalutamide.
CRRC TIMES ELEC (3898 HK +6.3%) advanced as market predicts that its IGBT chip mid- and low-end market share will see a decent increase, together amid speculation of it listing in the A-shr Star Board.
Market opened lower and it saw a choppy start hitting the day low just after an hour at 7,315 before working back to flat over the next 90 minutes. Then eased back before re-test flat. Then traded sideways around flat into the close.
The new Melbourne lockdown -VE for sentiment. Weakness in Financials, along with Rio Tinto (Pilbara ops weak on heavy rain & replacement mine issues). Woolworths and Afterpay also weak.
Leaders were BHP, CSL and Fortescue Metals.
Nikkei opened lower after Powell’s comments hurt the Yen; and tested down to 27,850 in early trades. Rebounded to 28,100 but then sold down again to 27,900 worked better and then traded around 28,000 level. BoJ left rates unchanged, tweaked forecasts and announced increased green bond buying. PM opened higher; initially traded sideways for 45 minutes, then rallied to the day high (28,201) before selling down to close -276pts (-1%) @ 28,003.
Topix opend lower 1,930 ticked lower but then rebouned to flat and then flirted in the green to 1,942 before selling back down to 1,930 then rebounded and traded around 1,935. PM opened higher trading 1,942/1,935 but ticked lower into the close to finish -7pts (-0.4%) @ 1,932
Overall volumes light.
Short trading week next week as the Olympics start.
Samsung and other tech weak after TSMC earnings and inflation fears. Covid cases eased to 1,536 from 1,600 Thursday but authorities considering tighter social distancing restrictions.
BoK Governor says low rates not good, think he can raise later this year. T/O was moderate; Foreigners and Institutions net sellers
Kospi opened lower, sold down to 3,270 and after 40 minutes sold down to 3,260, bounced to 3,270 and then traded sideways until 2pm when it ticked higher to 3,277 and traded around there into the close -9pts (-0.3%) @ 3,277 Tech names weak after TSMC earnings.
Kosdaq similar pattern sold down initially and traded 1,045/1050. Worked higher from around 1:40pm to 1,053 then drifted lower to close -2pts (-0.2%) @ 1,052
Taiex opened lower around 17,840 and worked slightly better but saw resistance approaching 17,900 level, having tested that level but not broken above briefly dropped to test 17,850 but bounced back to 17,900 level and traded around there to close -139pts (-0.8%) @ 17,895 T/O was US$20.45b vs US$16.25b Thursday
CECC reported 32 new covid cases. Weakness in TSMC post results but its CEO said the trial production of 4nm chips will kick-start this quarter on schedule, with the terminal applications in smartphones and high performance computing (HPC), Chinese media reported.
Northbound RMB 57,202m Sell 30,300m vs 26,902m Buy
Southbound HK$ 15,321m Sell 7,371m vs 7,950m Buy
Northbound RMB 72,325m Sell 36,536m vs 35,789m Buy
Southbound HK$ 16,477m Sell 8,239m vs 8,238m Buy
HKEX (00388.HK) Short selling Ratio 16.279% closed at $524, +3.8%
BABA (09988.HK) Short selling Ratio 24.540% closed at $209.4, -0.6%
PING AN (02318.HK) Short selling Ratio 31.544% closed at $73.4, +0.5%
TENCENT (00700.HK) Short selling Ratio 8.813% closed at $564, -0.2%
MEITUAN (03690.HK) Short selling Ratio 13.870% closed at $290.8, +0.1%
AIA (01299.HK) Short selling Ratio 18.169% closed at $96.15, +0.1%
CCB (00939.HK) Short sellingRatio 13.195% closed at $5.58, unchanged
HSI & HSCEI Constituents on Move:
EVERGRANDE (03333.HK) Short selling 14.371% closed at $9.8, +9.5%
SHENZHOU INTL (02313.HK) Short selling Ratio 9.728% closed at $166.6, -4.9%
XIAOMI (01810.HK) Short selling Ratio 13.820% closed at $28.25, +4.8%
ALI HEALTH (00241.HK) Short selling Ratio 31.384% closed at $15.22, -3.3%
HENGAN INT'L (01044.HK) Short selling Ratio 40.504% closed at $48.7, -3.1%
HSMI & HSSI Constituents on Move:
VINDA INT'L (03331.HK) Short selling Ratio 41.753% closed at $20.55, -12%
CRRC TIMES ELEC (03898.HK) Short selling Ratio 6.804% closed at $55.5, +6.3%, hitting new high
HUTCHTEL HK (00215.HK) Short selling Ratio 5.881% closed at $1.72, +6.2%, hitting new high
SHENGYE CAPITAL (06069.HK) Short selling Ratio 5.297% closed at $8.98, +5.9%, hitting new high
YANZHOU COAL (01171.HK) Short selling Ratio 7.182% closed at $12.14, +4.1%, hitting new high
WUXI APPTEC (02359.HK) Short selling Ratio 13.829% closed at $190.1, +3.2%, hitting new high
MARKET HOURS NEWS.
Xia Baolong, director of the Hong Kong and Macau Affairs Office, has been reported to foresee that, under the guidance of the Communist Party of China, Hong Kong's economy would continue to flourish with housing problem to be resolved and younger people able to own properties
The People's Bank of China (PBoC) issued a white paper on the research and development of digital yuan, stressing the country will continue to press on the digital yuan R&D and pilot program in a solid and appropriate way, without an established timetable.
Ant Group may sell at least 5% of its stake in One97 Communications, the parent company of Paytm, prior to the latter's November IPO, reported The Economic Times.
Ant currently holds around 30.33% of One97 Communications. Paytm hopes to bring down Ant's shareholding to less than 25% to comply with rules from Securities and Exchange Board of India for floating as a "professionally managed company".
Cyberspace Administration of China (CAC) announced to launch on-site cybersecurity investigation on Didi Chuxing Technology Ltd. from 16 July, along with the Ministry of Public Security (MPS) and other relevant departments.
VINDA INT'L (03331.HK) announced that its GPM came in at 37.4% in the interim period ended June, down 1.1 ppt yearly. The CEO Li Jielin Karen disclosed that the GPM has already been maintained at a higher level during the period as the company hoarded up inventory of wood pulp at low price to alleviate cost pressure. She forecast the existing wood pulp inventory to still be positive to the future GPM, viewing the cost structure in the 2H21 to be foreseeable.
Chris Tung, chief marketing officer at BABA-SW (09988.HK), expressed that the "Taobao Maker Festival" will be held from 17-25 July in the Shanghai National Exhibition and Convention Center, with the venue being curated to resemble an ancient Tang dynasty city to provide a new brand experience.
Tung remarked that the company was pleased to see many younger buyers and sellers joining Taobao, with the average age of the business participants of this year's festival recorded at 30.
The Government should heighten the overall home supply target with a multi-pronged approach to expedite land expansion, including studying the development of wetlands and some 16,000 hectares of green belt areas, commented Adam Kwok, Vice President of The Real Estate Developers Association of Hong Kong (REDA), at a forum yesterday. Kwok restated his willingness to cooperate with the Government's resumption of private land in the New Territories under the Lands Resumption Ordinance. However, land owners should be given a reasonable period of time for self-initiated development before land resumption, he added.
The U.S. Court of Appeals for the District of Columbia and the U.S. Court of Appeals for the Third Circuit agreed to the Justice Department's request to dismiss appeals to court rulings regarding TikTok. U.S. courts had frozen executive orders by former President Donald Trump that sought to bar new installs of the short video app.
TENCENT (00700.HK) has been recruiting chip architects, chip verification engineers and chip design engineers in recent months, according to its official recruitment platform. The positions are under the giant's Technology and Engineering Group (TEG), with locations spanning across Beijing, Shanghai and Shenzhen. In response, Tencent told The Paper that it has attempted to develop some chips in AI acceleration, video encoding and decoding as well as other specific fields based on certain business needs.
CATHAY PAC AIR (00293.HK) announced to launch a lucky draw as an encouragement for the Hong Kong citizens to receive vaccination for COVID-19. All fully vaccinated persons are eligible to participate in the lucky draw within the period from 16 August to 15 September.
Three private residential projects have commenced construction in May, up 4.8x MoM to 2,218 units, setting a new high in a single month in close to 12 months, according to data from the Buildings Department. In the first five months of the year, 12 private residential projects commenced construction, accounting for 2,741 units, down 47% YoY.
The worldwide smartphone shipment hiked 12% in 2Q21, mainly benefitting from the rollouts of vaccines around the globe, while gradually manifesting new economic and citizen norms, reported Canalys. The report stated that within the period, Samsung topped the chart with a 15% YoY increase in shipment, accounting for 19% of the market shares, while XIAOMI-W (01810.HK) was ranked second for the first time, with a 83% YoY hike in its shipment, accounting for 17% of the market shares. Apple trailed behind with 14% market shares and a mere 1% YoY increase in shipment.
JIANGXI COPPER (00358.HK) announced that the planned investment in annual productions of 100,000 tonnes of lithium copper foil, 220,000 tonnes of copper rod and 30,000 tonnes of casting materials. The total amount of investments is expected to be RMB12.8 billion, among which, the fixed assets investment shall be RMB8.5 billion and the working capital investment shall be RMB4.3 billion.
Payment service platform Paypal has increased its users' weekly purchase limit on cryptocurrency by 4x, from USD20,000 to USD100,000, while removing the annual purchase restriction of USD50,000 in total, reported foreign media. Loosening the purchase restrictions could provide clients with more options and greater flexibility when buying cryptocurrency, said Jose Fernandez da Ponte, PayPal’s vice president.
PRE MARKET HOURS NEWS
CHINA TELECOM (00728.HK) Positive Proft Alert announced that in accordance with the China Accounting Standards for Business Enterprises, the profit attributable to the shareholders of the Company for the six months ended 30 June 2021 will range from approximately RMB17.576 billion to RMB17.855 billion, representing an increase of approximately 26% to 28% compared with that in the same corresponding period of last year. It is estimated that the operating revenues for the period from January to June 2021 will range from approximately RMB213.606 billion to RMB218.417 billion, representing an increase of approximately 11% to 13.5% compared with that in the same corresponding period of last year.
U.S. President Joe Biden will issue an advisory warning American firms about the risks of doing business in Hong Kong due to a changing landscape, reported foreign media. Previously, Chinese Foreign Ministry Spokesman Zhao Lijian said the so-called U.S. warning was a typical example of political manipulation and double standard.
The Lands Department (LandsD) announced that it registered 11 lease modifications and two land exchanges in the Land Registry during the quarter ending June 2021, of which five were modifications of a technical nature involving nil premium.
The above land transactions realised a total land premium of about $13.814 billion. The land premium grew 39.1% QoQ, setting a new high in 10 quarters, reported media.
HUTCHMED (00013.HK) announced that the European Medicines Agency (EMA) has validated and accepted its marketing authorization application (MAA) for surufatinib for the treatment of pancreatic and extra-pancreatic (non-pancreatic) neuroendocrine tumors (NETs).
VINDA INT'L (03331.HK) announced interim result ended June 2021. The net profit amounted to HK$967 million, up 6% year-on-year. EPS was HK$0.806. A interim dividend of HK$0.1 was declared, against HK$0.1 in the corresponding period of the previous year.
A-LIVING (03319.HK) announced that AGILE GROUP (03383.HK) would purchase 50 million shares of the Company (representing approximately 3.52% of the share capital of the Company) from Greenland Holdings at HK$32 per Share, for a total consideration of HK$1.6 billion.
COSCO SHIP HOLD (01919.HK) announced that it had entered into contracts with Cosco Shipping Heavy Industry, a wholly-owned subsidiary of the Company's controlling shareholder COSCO SHIPPING, for the construction of ten vessels, including six units of 14,092 TEU container vessels and four units of 16,180 TEU container vessels, at an aggregate consideration of US$1.496 billion (equivalent to approximately HK$11.67 billion).
AIR CHINA (00753.HK) announced that the number of Passengers carried reached 38.6107 million for the first half of 2021, up 55% year-on-year. Total Cargo and Mail carried increased by 32.9% to 600,500 tonnes during the period.
WUXI APPTEC (02359.HK) Positive Profit Alert The net profit attributable to shareholders of the Company was estimated to increase by a range between RMB910 million to RMB944 million for the first half of 2021, as compared with RMB1.717 billion for the first half of 2020, representing a year-over-year increase of a range between 53% to 55%.
In accordance with the PRC’s Accounting Standards for Business Enterprises, SHANGHAI PECHEM (00338.HK) is expected to record a net profit attributable to equity shareholders of the Company of RMB1.11 billion to RMB1.36 billion, a turnaround from loss of RMB1.716 billion in the same period of last year.
PING AN (02318.HK) announced that the accumulated gross premium incomes of the four controlled subsidiaries of the Company for the first half of 2021 totaled RMB422.21 billion, down 5.2% year-on-year.